Digital advertisement, what’s the point?

 Last week Mitch Joel ( @mitchjoel ) made me think!

In his article “The Trouble With Online Advertising”  I made a very short comment “ … Why not just skip ads?… and Why not just get useful?…“ 

Since my comment where so brief I thought that exploring this a bit further might be worth while?

Mitch’s article point at the fact that very few people like online advertisements, they hardly click on them and digital ads doesn’t pay off very well for the owner of the website. (That is if you don’t have an enormous amount of people using your web solution, such as Facebook.com or google.com, where the numbers of people is so huge that it becomes a money making machine, after all.)

Still, most of what happens in online advertisement and marketing is an eyeball game. “Collect as many users as possible, and sell the crowd to advertisers!”  – Just as in the good old days. Many voices are now speaking about that this isn’t working. Advertisement, also in the digital environment is increasingly becoming regarded as pollution, and doesn’t make sense.

In the print world it had a purpose, in a digital environment it’s just a set of extra click’s between a customers needs and suppliers ability to deliver. “Why not skip the ads? ” was my question and go directly to deliver the solution to the user.

We know all the arguments coming from the business of marketing and commerce. – “Sales don’t work like that” – “The purchase process doesn’t work like that” –“the customers are maybe not aware of their needs yet, and need marketing to realize their needs, before they will be willing to make a decision and actually purchase a product”. We could go on.

Is there an elephant in the room?
The questions are wrong! It’s not about “How to market better?” I belive it’s about how to provide users with what they need, when they need it; at the place they are! – But that is not all…

“Why doesn’t anyone bother to get to know me?” “Why do I have to do the “purchasing process” all by my self?”  A wide range of businesses spend time getting the metrics right, collecting info about their costumers, defining target groups, finding out at when it’s best to present traditional advertisement to users. But…

Companies (and media houses) is not working to get to know what problems I could need help from someone to solve in my life. And it’s not about finding out what my values are, and what kind of ideas I’d like to support.

Maybe it is as Simon Sinek says? : “Because to many businesses doesn’t know why they are in business” and he states: “Profit is not a purpose of business, it’s a result.”  This TED talk  of his is about why people buy something at all. – Thank you for sharing Chuck Peters! ( @cpetersia )

For me, it’s sounds more important to discuss the purpose of your business, and then find ways (yes, possibly including advertisement) to meet users and customers that would like to support your purpose.

Feel free to Contact me for an informal meeting. if you would like to discuss your challenges.

Some older blog article (more or less) relevant to this subject:

Slik kan aviser ta betalt for innhold og kommersielle produkter 

What’s the value of you in the digital universe? 

Seven” right things” to do in digital business today

 

The Norwegian news business is restructuring, but is it enough?

This autumn will be one of the most thrilling times for Norwegian media business ever.  All major media companies faces no alternatives but change. What that change will be, is still unclear.

Schibsted is restructuring and is going to down size their paper activity. Schibsted says that they will reduce costs with a full year effect of approximately NOK 500 million over the next two years in the subscription based newspapers of Norway and Sweden, in addition to Spain.

From Reuters:“- The aim is to continue the digital transition in our media houses in order to gain as strong positions online as they enjoy today in traditional media. Strong editorial products will continue to be the fundament for healthy and profitable media house businesses also in the digital future, CEO Rolv Erik Ryssdal says.”

A pressen will announce their strategy at the «Media Business 2012-2016» conference in Oslo the 29th of august. We know that A- pressen and the CEO Thor Gjermund Eriksen will have to sell at least 7 local newspapers in order for the Norwegian authorities to formally accept the merge between Edda media and A-Pressen. According to  Kampanje  Eriksen states that the job ahead will be to merge the to media houses into one modern and powerful media company.

TV2’s CEO  Alf Hildrum says that they will spend more money than ever to maintain or even grow their market position. They now have Egmont as one of the major owners and have something to prove towards their owners. Not to forget that the broadcast business  also is in radical change and meet competition outside their normal arenas.

The main actions for the three major media companies as far as I can se it is in short this:

• Reduce cost and increase efficiency by:
  • Relocating
  • Restructuring of the organizations
• Increase and maintain market positions by:
  • Invest in mobile platforms
  • Invest in (digital?) content production

Does this sound familiar? This sounds like cut offs in staff.  I do hope there are changes more fundamental than this in the business going on.

I did not read a word about business models, new and appealing products both towards readers/ viewers or on the marketing/ commercial side.

I didn’t hear anything about investments in external companies that can offer such, or internal innovation activities.

I did not hear a word about what the media knows about their readers/viewers/ users needs – or how to monetize on the value of such knowledge.

And I didn’t hear anything about how to meet the real competitions in the media world: How to meet the fact that Google, Facebook, Twitter, Linkedin, streaming media solutions like Telenor is establishing and other disruptive initiatives are collecting the traditional media revenues in a quantitative- and qualitative way that has never happened before?

Fact is that a whole lot of other major enterprises have the ownership to the users/readers/viewers and are able to monetize that far better than the traditional media industry.

I hope that, by now, the news- and media industry has a strategy and concepts for revenues that goes beyond subscriptions and advertisement.

And I hope they are searching and getting hold of external competence, that is not “hold as hostages” but that get real influence with their outside perspectives.

This is far more important to focus on than the above mentioned bullet points. I’m not saying that reducing cost and increasing efficiency is not important, it’s just that it is basic, what will make the business transform and become healthy and strong for the future is in innovation and meeting real needs better in the new digital world.

As I’ve blogged about many times before, business models and concepts needed, already exists and many more are in their start-up, but I’ve seen few coming from inside the business itself.

For the people working inside the business (media people, and journalists) there are radical changes ahead. How to get the owners of media/ news companies and the employees to work together to make the needed change to happen?

In my opinion there is a problem with the public discourse, because it’s not easy to criticize your own employer. And it’s not easy for the parties to accept criticism from outside either.

In a situation where serious change has to happen, I’m afraid we will see defensive rhetoric’s from all sides in the coming year. Unions will try to defend their members from cut offs; management will try to defend the profit rate for their owners.

This energy rather ought to be used to discuss how to best serve the public in a manner they will benefit from, and enable the media/ news business to get a fair share of the value created.

Social responsibility in business

Social responsibility has become a “hot topic” over the last years. I’ll present some viewpoints to the subject, but first three examples from my network:

 

 

 

 

 

 

Ferd (@FerdCEO)
Why is it that a “hard core” industrial-and financial company like Ferd spends 20 mill NOK a year on supporting Social entrepreneurship?

In order to learn more I visited Ferd before the summer and had a long talk with Øyvind Sandvold (@oyvind_sandvold ) about the work Ferd is doing. What they support and what is outside their scope. You can read more about it HERE

I think the short answer is because they can! They have the assets and also valuable knowledge to share. Of course the element of charity is there.

But to my surprise Øyvind told me about another aspect: That there is a great “return of investment” for the Ferd company and the employees. Every project they support includes that one of the investments consultants (from the other investment funds) take part in the project as a board member, consult the Social entrepreneur and ensure that strategy, business plans and company start up secure the social business and its objective, and also has a growth plan. Øyvind tells me that these projects have become some of the most attractive assignment the employees can get involved in. They learn a lot, make great friends with people in the projects and experience that it’s very meaningful to provide their knowledge and to support social change. The most important part however is that Ferd as a company gets valuable knowledge in return.

Interesting enough: The Ferd social entrepreneurs has yet not received one application for a digital project!

Kavli (@KavliFoundation)
Most people in Norway know of the company Kavli. The Kavli Group is one of Norway’s largest and most international food groups, with some 800 employees creating a turnover of about NOK 2 billion. The companies produce goods for more than 20 countries. Maybe fewer people are aware of the fact that the profit from all Kavli products is channeled back to society, via the the Kavli Trust? They mainly donate money and focus on advanced science research, cultural activities and humanitarian work both in Norway and international.

Kavli has supported a great range of projects since 1962 and it’s interesting to note this project: Barnevakten.no  (Kids and Media). The organization has acquired a global reach with backing from the Kavli Trust. It is now a big operation with various web-based activities in the USA, the UK, Australia and Denmark as well as in Norway.

Bien Bank (@BienSparebank)
Bien bank is a small bank and the only local bank in Oslo. It used to be a savings bank owned by the customers, and is now owned by a trust. In the same manner as Kavli, Bien banks profit is channeled back to the population of Oslo by supporting informational and educational activities towards children and youth, art and cultural projects and community initiatives.
Bien tells me that they are looking into digital projects as we speak.

In addition to these few examples, we all know of the wide range of classical charity organizations, aid organizations and government’s engagements of all sorts.

As we see social responsibility is not at all a new idea. Our western democracies are built upon such ideas. What I believe we will se in the coming years (and why I write about it) is new and innovative initiatives, more and more of them will be digital. And more and more of them will have elements of what Ferd has implemented: In short – funding and expert help towards Self supported and sustainable social entrepreneurs.  

We will se “niche” projects from groups that want to take part in changing a business, like  Spot.us that says this about themselves: “Spot.Us is an open source project to pioneer community powered reporting.”… (spot.us red) “provides a new opportunity to expand the impact of public media journalism by making it more responsive and responsible to the public, while deploying new ways to support freelance reporters and the newsrooms that depend on them.”

As a warning: We will also see fraud! Solutions created only to enrich criminals, like the warning states in this article in e24 concerning the risk of scandals and fraud in crowdfunding

But should we let the risk of criminal acts from a few, stop the actions from millions of people and thousands of companies around the world that genuinely want  to help and improve the world we live in?